E-grocers shorten the delivery time by following farm-to-plate model

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Online startups like Shopkitana and Jumbotail follow the farm-to-plate model to eliminate middlemen like distributors and brands`agents.

The main aim of these startups is to reduce the delivery cycle to 24 to 48 hours, but removing the middlemen. The online grocery startups BigBasket, ShopKirana, Junbotail, among others, are the ones who are doubling down on farm-to-plate sourcing models since there is a significant spike in the demand for fresh produce.

Small and medium scale farmers along with the Fast Moving Consumer Goods brands are relying on technology startups to sell locally since free movement of goods continues to be a challenge and transporting and selling goods in a different state is difficult for them.

Startups are helping Kirana owners and farmers by moving to a technology-led sourcing model by on-demand orders for Kirana owners and dashboards for demand forecasting for farmers and Kiranas. Technology startups also help the Kiranas and farmers by shifting them to a formal economy by opening up bank accounts and digital payment accounts.

Almost 80% of the fruits and vegetables and other fresh produce items are sourced directly from farms for grocery e-tailer BigBasket. The “farm connect” program of BigBasket, which was active since 2015, has 50 collection centers across 15 states. The farmers, under this program, bring their produce to the collection centers which is located near their villages. BigBasket identifies small farmers that grow specific crops and vegetables that border with tier-1 and tier-2 cities and procure this supply directly from them.

Most of the belts which grow fresh fruits and vegetables are located near the vicinity of large cities because they are highly perishable and cannot sustain long periods of travel, hence e-grocers identifies these belts and set up infrastructure in these belts.

Amazon India plans to offer the largest selection of fresh fruits and vegetables to customers in 2 hours by engaging with farmers and government bodies to develop a sustainable farm-to-folk model by investing in technology. Jumbotail is helping small shop owners by offering collateral-free credit in the lockdown where sources of credit have dried up. The collateral-free credit is possible due to a high rate of repeat purchases, wherein 85% of the monthly sales come from retail purchasers who purchase 10 to 30 times a month.

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